Workers can produce more if they work with more and better machines. Finally, improvements in economic organization can also promote economic growth. The legal system of a country, for example, strongly influences the degree of economic cooperation. Effective economic organization will facilitate social cooperation and channel resources toward the production of goods that people value. Conversely, economic organization that protects wasteful practices and fails to reward the creation of wealth will retard economic progress.
People earn income by helping others.
People differ with regard to their productive abilities, preferences, opportunities, development of specialized skills, willingness to take risks, and luck. These differences influence incomes because they influence the value of the goods and services individuals will be able or willing to provide to others. While considering differences among people, we must not lose sight of precisely what income is. Income is simply compensation received in exchange for productive services supplied to others. People who earn large incomes provide others with lots of things that they value.