The formula of dT>0

What is the fundamental of economics?


Mathematically, dT >0 where T means transaction.

For example, the wealth between a programmer with a baking pan and a baker with a laptop is not a cooking pan plus a laptop. Instead, the baker can maximize the wealth by exchanging the baking pan with a laptop.

The wealth = baking pan + laptop + transaction

In Saudi Arabia, there is a lot of crude oil while there is a little vegetable.

China is rich in producing vegetables and destitute for crude oil.

The maximization of wealth comes from the transaction made between China and Saudi Arabia. To do so, the cost might be building oil pipes.

The wealth = oil + vegetables + transaction - cost of building oil pipes

In the whole system:

with a transaction, the wealth increase;

without a transaction, the wealth decreases.

For all labor productivity, dT>0. (e.g. The 9-5er exchange salary with 8 hours.)

The more transaction it is, the more wealthy the system will be.

When there is no transaction, the wealth is maximized. (This is Pareto optimality)

The secret weapon to analyze a problem is dT>0.

The fundamental of economics is about the maximization of the transactions.