Profits direct businesses to create wealth 7. Competition increases efficiency and innovation 8. Taxation and regulation discourage production and destroy wealth 9. Political decision-making favors plunder over production 10. For centuries people believed that for exchange to occur the goods exchanged must be of equivalent value.
Old habits die hard.
This is still one of the most common economic fallacies. But the intense interest that people take in trading, whether they trade dollars for a new stereo, or their labor for a paycheck gives the lie to this misconception. Voluntary exchanges benefit both parties to the exchange and this benefit is rightly seen as an increase in wealth for both. Air conditioners in Arizona and space heaters in Saskatchewan. Exchange creates wealth in indirect ways, as well, by creating the possibility of specialization and division of labor.