The principal targets of Economics
One of the principal targets of Economics is the intention to improve people’s standards of living. However, the practical implementation of this idea seems to be challenging. At present, there is no confirmed method to achieve this goal. Meanwhile, the thoughts of Adam Smith on the subject are not only valuable in terms of a better understanding of the issue but also comply with the principles of economics (Mankiw, 2021). The economist saw society’s future in mutual assistance and cooperation, and such an approach allows drawing an analogy between his ideas and specific economic concepts.
The main principle that relates to Smith’s ideas is the correspondence of the cost of goods to the received benefits. It explicitly demonstrates that the more people give in return for products, the more they get as a result (Mankiw, 2021). From the perspective of human relationships, this concept can be applied to any kind of cooperation since the giver is the one who ultimately benefits most. Another principle that correlates with Smith’s vision is the response of people to incentives (Mankiw, 2021). It indicates the reaction to changes, including one’s behavior, and fits into the idea of being considerate.
A turning point in economic development in 1914
The importance of July 28, 1914, and the month of August 1914 is defined by the fact that they marked a turning point in economic development with the outbreak of World War I. During the period preceding the conflict, world technology and the economy were developing rapidly (Amadeo, 2020). The time under consideration changed the situation entirely and reversed the process to blaze a new path for the economics of the future. The suspicion towards foreign citizens was growing and resulted in a row of restrictions, for example, on trade and capital flow (Amadeo, 2020). In this way, further economic development was destined to be sporadic.
The current situation in the world is explained by those events. First, the collapse of production and a shortage of goods and food played the most significant role in the process (Amadeo, 2020). Under those circumstances, the world economy’s orientation was on the provision of the basic needs of people rather than the development of new technologies. Second, the most essential outcome of the war in terms of the economy was women’s employment (Amadeo, 2020). It positively affected their rights and thereby changed the gender balance in the workforce.
The situation of low-income workers
One of the most critical economic issues is the situation of low-income workers in the market. Therefore, measures are needed to increase the number of middle- and high-income workers. However, this task can be performed only in the case of support from present-day companies and society. The former has many methods to ease the financial stress of such employees. According to the statistics, thirty-nine percent of large employers offer high-deductible healthcare plans (Glink, 2019). Hence, this measure can be used to allow people to deal with emergencies in the event of illness and improve the situation.
As for society and non-profit organizations, their contribution to finding a solution to the problem of low-income workers relates to assistance in financial matters. Since most people face problems in difficult situations or, in other words, emergencies, such as illnesses or major car repairs, they need help with organizing their budget (Glink, 2019). In this case, poverty assistance programs focused on creating savings rather than addressing the problem of low income directly can be beneficial. They will allow reducing the number of low-income workers by instilling management skills and, therefore, confidence in one’s abilities to deal with emergencies.
The difference between a small business owner and a CEO
The difference between a small business owner and a CEO in the way they do business is varying mindsets. Indeed, the former seems to be more oriented toward the sustainability of operations and the environment, whereas the latter focuses on the company’s expansion. This fact is explained by their perceptions of business promotion and defines their expenditure decisions. Small business owners usually manage fewer people and are concerned about the quality of their products and services, whereas CEOs see expansion as a search for potential investors (Xynias, 2019). Hence, their behavior is conditional upon these ideas.
This difference also relates to the factors that increase profits for small and large businesses. In the case of corporations, they include many people involved in their daily operations and investing money in their projects. As a result, CEOs emphasize the importance of business relationships for the promotion of their companies in a rapidly changing world. Small business owners, in turn, survive due to their reputation and customer base and do not need such expansion. Thus, they focus more on sustainable development since their values are stability and quality, both in business and the environment, rather than variability and quantity.
References
Amadeo, K. (2020). The economic impact of World War I. The Balance. Web.
Glink, I. (2019). How to help ease the cycle of poverty for low-wage workers. Human Resource Executive.
Mankiw, N. G. (2021). Principles of economics. Cengage Learning.
Xynias, M. (2019).It’s the CEO mindset that will make your business grow. Entrepreneur. Web.