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Helpful prior knowledge and learning objectives
Helpful prior knowledge and learning objectives
Helpful prior learning:
Section 1.1.1 The economy and you, which explains what an economy is and how it is relevant to students’ lives
Section 1.1.2 The embedded economy, which explains the relationship between the economy and society and Earth’s systems
Section 1.1.3 Degenerative economies, which explain a number of problems for people and planet with the way our current economies operate
Section 1.1.4 Regenerative economies, which explains how circular, distributive and caring, needs-based and sufficient economies can meet human needs within planetary boundaries
Section 1.3.2 Values in the economy, which explains how values affect human behaviour, judgements, and the economic tools we choose to use in the economy
Section 1.3.9 Power in the economy, which explains where power comes from and how it shapes economic relationships
Section 3.1.1 The market as a system, which describes market parts and their relationships, and the connection between the household and the rest of the economy.
Section 3.1.2 Demand and supply, which explains the factors affecting supply and demand and the dynamic relationships and feedback between supply, demand and prices.
Section 3.1.3 Elasticity, which explains the concept of elasticity generally, and focuses on the factors affecting price elasticity of demand and its link to market power.
Section 3.1.4 Uses and limitations of markets, which explains the coordinating and innovation benefits of markets as well as their limitations in terms of inequality and extraction.
Section 3.1.5 Ecologically embedded markets, which explains how markets are embedded in ecological systems through businesses' use of energy and material resources and their impact on ecological systems in the context of planetary boundaries
Section 3.1.6 Socially embedded markets, which explains how markets are embedded in social systems with attention to culture, social movements and state policies
Section S.1 What are systems?, which explains what a system is, the importance of systems boundaries, the difference between open and closed systems and the importance of systems thinking
Section S.2 Systems thinking patterns, which outlines the core components of systems thinking: distinctions (thing/other), systems (part/whole), relationships (action/reaction), and perspectives (point/view)
Section S.5 Causal loops, feedback and tipping points, which explains the feedback loops that can stabilise or destabilise systems
Section S.9 System traps, which explains how system structures, like reinforcing feedback, too weak or late balancing feedback, and/or pursuing flawed goals, can create persistent problems.
Learning objectives:
describe how profit is calculated and why it matters in market economies
explain how profit can arise from different sources, including value creation through innovation, investment and risk-taking, but also from value extraction from labour, care, nature, public systems, and power over rules
In 2022, energy prices rose sharply across Europe after Russia’s invasion of Ukraine disrupted gas supplies. At the same time, oil and gas companies announced record profits, while many people struggled to heat their homes as energy bills rose. People started to ask how energy companies could gain so much while energy consumers faced such hardship? To answer this, we need to understand what profit is, where it comes from and why that matters.
Figure 1. How can energy companies earn high profits while average people struggle to pay for their basic energy needs?
(Credit: Solarisys, licensed from Adobe Stock)
What is profit?
What is profit?
Profit is the money left after a business pays its costs. Imagine a school lemonade stall. You spend €60 on lemons, sugar, cups, and help. If sales are €80, the €20 left is profit.
Profit = revenue from sales − costs of production
In market systems, businesses need to cover their costs, called breaking even, to survive. Earning profit gives them extra money on top of that to invest in the business, maintain equipment, and cope with unexpected changes. A business that cannot at least break even will usually close.
Some businesses aim for profit maximisation, using their power to raise prices, lower costs and grow output as much as possible to increase profits. Many businesses, particularly small ones, do not do this. They aim for stability. They earn enough to support a household, keep operating, and serve a community. Profit exists, but it is limited and often reinvested, rather than aiming to expand business endlessly.
Profit plays a different role under capitalism (Section 3.2.1). In capitalist economies, most capital, such as money, machines, land, and buildings, is privately owned. Markets dominate how goods and services are provided, and firms compete for profit.
Profits are often reinvested to expand production, enter new markets, or gain advantages over competitors. They can also be paid out to owners or shareholders, increasing their wealth. When profits are turned into more capital that owners control, this is called capital accumulation. The goal of capital accumulation shapes decisions about wages, prices, technology, and resource use. Over time, those who own more capital gain more income and influence, which can concentrate wealth and power.
Figure 2. Profits under capitalism can result in capital accumulation and concentrations of power. (Credit: jirsak, licensed from Adobe Stock)
Where does profit come from?
Where does profit come from?
The €20 profit from the lemonade stall doesn’t just magically appear. Let’s take a closer look at how profit actually comes about.
The dominant narrative about profit
The dominant narrative about profit
In mainstream economics, profit is often explained as a reward for risk-taking, investment, and innovation. Starting a business is risky. Entrepreneurs invest time and money without knowing if their idea will succeed. Profit is seen as a fair return for taking that risk and for creating something new or better. This can happen when firms:
meet people’s needs, like a tailor who makes and mends clothes (Figure 3);
create products people value, like a phone that is easier to use; or
organise resources efficiently, such as reducing waste or finding cheaper suppliers.
Innovation and creativity are central to this story. For example, a company that invents a new app or a more sustainable product can earn higher profits if customers prefer it and buy it. Without profit, businesses might not take risks or invest in new ideas, and economies could stagnate.
But this explanation is not complete. It focuses on how profit rewards value creation, but it overlooks how profit can also come from value extraction, where individuals or firms use power to claim the surplus created by others.
Figure 3. Entrepreneurs can earn profits when they meet people’s needs, create products people value, and organise resources well.
(Credit: Friends Stock, licensed from Adobe Stock)
Other perspectives on where profit comes from
Other perspectives on where profit comes from
Profit also reflects how markets are embedded in social and ecological systems (Section 1.1.2). Different economic perspectives focus on where value is created and who captures it.
Ecological economists point out that when businesses use these services without paying the full cost of maintaining or restoring them, part of their profit comes from using and using up what nature provides for free. Research by S&P Global Sustainable1 and the Capitals Coalition estimated that large publicly listed companies caused about US $3.7 trillion in environmental damage in 2021, more than the total profits of the world’s 500 largest firms. If these costs were paid by the companies, or internalised as economists say, many profits would shrink or completely disappear. Seen this way, some profits come less from creating value and more from using up our shared planetary resources.
Figure 4. Businesses earn part of their profits from exploiting nature when they use natural resources without paying the full cost of restoring them.
(Credit: Bob, licensed from Adobe Stock)
Surplus from nature
Every business depends on energy, materials, and natural systems. Forests grow timber, soils support crops, oceans absorb waste, and the atmosphere helps stabilise the climate. Economists call these ecosystem services. They are the life-support systems that make all economic activity possible.
Ecological economists point out that when businesses use these services without paying the full cost of maintaining or restoring them, part of their profit comes from using and using up what nature provides for free. Research by S&P Global Sustainable1 and the Capitals Coalition estimated that large publicly listed companies caused about US $3.7 trillion in environmental damage in 2021, more than the total profits of the world’s 500 largest firms. If these costs were paid by the companies, or internalised as economists say, many profits would shrink or completely disappear. Seen this way, some profits come less from creating value and more from using up our shared planetary resources.
Figure 5. Some profits come from paying workers less than the value they create, often due to imbalances in power between employers and workers.
(Credit: Evgeniy Kalinovskiy, licensed from Adobe Stock)
Surplus from labour
Workers design, build, clean, carry, serve, and care. Their work adds value to what businesses sell, but in many economies workers are paid less than the value they create. The gap becomes a surplus that can be claimed as profit by the business. Economists in the Marxist tradition describe this as surplus value, which is more likely when employers have more power than workers, especially when jobs are insecure or scarce.
Figure 6. Unpaid care and domestic work, like cooking and feeding people in a household is an unpriced input to the production process, a source of surplus captured as profit.
(Credit: soumen, licensed from Adobe Stock)
Surplus from care work
Every economy depends on care. People need to be fed, taught, supported, and cared for, especially when they are young, ill, or old (Section 2.1.3). Much of this work happens in households and communities and is unpaid.
When workers arrive to work healthy, rested, and supported, businesses benefit from care they do not pay for. This lowers wage costs and increases profit. Feminist economists such as Marilyn Waring and Nancy Folbre describe unpaid care as an unpriced input to the economy, much of it done by women.
Figure 7. Businesses depend on shared systems such as transport, energy, courts, education, and public health. Avoiding taxes allows firms to capture more surplus.
(Credit: Yan, licensed from Adobe Stock)
Surplus from public systems
Businesses rely on shared systems such as roads, energy grids, courts, education, and public health. These systems require collective investment through states because markets alone tend not to provide them or to underprovide them.
When these systems work well, they lower business costs by supporting trained workers, reliable transport, legal protection, and social stability. Firms benefit from these shared social systems and physical infrastructure whether or not they paid for its full creation or upkeep through their taxes.
When businesses contribute less than their fair share to state revenues, more of this collectively created public value can be captured as private profit. This can happen in many ways, including by moving earnings to low-tax areas, a practice known as base erosion and profit shifting (BEPS). Research shows that these practices reduce the tax revenues available to states to fund public services and infrastructure, and they are very common globally.
Surplus from power and rules
Profit is also shaped by power, the ability to influence events or the behaviour and decisions of other people (Section 1.3.9). In markets, this includes who sets prices, controls resources, or shapes rules.
When a small number of firms dominate a market—especially for goods or services with inelastic demand where people have few alternatives and are less responsive to price increases (Section 3.1.3)—they can charge higher prices or push workers or suppliers to accept lower payments. Economists call this market power (Section 3.2.4).
Control over intellectual property, data, land, or digital platforms can also create profit through control of an asset that others must use, rather than value creation. Profits earned this way are called economic rents, and have raised ethical concerns across many cultures for centuries because wealth is gained through control rather than productive contribution.
As profit becomes more dependent on surplus extraction, firms may attempt to shape the wider rules that affect their costs and bargaining position with other stakeholders in the economy. Firms with more resources can influence laws and regulations to weaken labour protections and costly business regulations, or lower business taxes, a process called state capture (Section 5.2.3). This can lower business costs and increase surplus. Over time, increased profits and wealth reinforces power further (Figure 8). Donella Meadows described this feedback as the success-to-the-successful system trap (Section S.9).
Figure 8. Reinforcing feedback loops showing how increases in business size and market power lead to economies of scale and higher profits which lead to further increased market power (right) and political power (left).
What impact does profit-seeking have on social and ecological systems?
What impact does profit-seeking have on social and ecological systems?
Across this section, you have seen that value is created through work, care, ecosystems, and public systems. Businesses, like all others in the economy, completely depend on healthy social and ecological systems to function.
When profit-seeking extracts excessive value from social and ecological systems, they can weaken. Long working hours and low pay reduce workers’ time and energy for care in their households and communities. Some digital business models compete for attention (Figure 9), leaving less time for relationships, care and rest. Low corporate taxes or tax avoidance strategies reduce funding for public services, leading to austerity and weaker households, communities, health care, education and transportation systems (Section 5.2.1). Ecological damage reduces ecosystem services, warming the climate, disrupting water cycles, polluting land and air, and collapsing the biodiversity on which all life depends.
Figure 9. Some business models require capturing as much of our attention as possible, resulting in less time and attention spent on care.
(Credit: Stanislaw Mikulski, licensed from Adobe Stock)
Scale and direction of profit matters too. In a small business, profit often pays the owner for their own work to add value, and supports their household as a form of income. In large or publicly listed firms, a significant share of profit goes to shareholders who do not take part in producing goods or services. Value created inside the firm is extracted and given to (often already wealthy) people outside the firm, rather than reinvested in the people, institutions and ecological systems that make the business possible. Such extraction is not only bad for society and ecosystems, but will also eventually damage the business itself.
For this reason, large or rising profits deserve careful attention. They might signal innovation and true value creation. But they might also signal that value is being taken from the social and ecological systems that support all economic life. A regenerative economy requires us to question where profit comes from, where it goes, and whether it strengthens or undermines social and ecological systems.
If profit-seeking can weaken care systems, ecosystems, and public services, then societies must decide how much profit is acceptable, and under what conditions. Should profits that arise from crisis (windfall profits) or scarcity (rents) be treated differently from profits earned through long-term value creation? When profits grow very large, should some of that value be returned to society (redistribution) to repair the systems that made those profits possible? Should we have laws that prevent value extraction to begin with (predistribution)? Different countries have answered these questions in different ways, and discussions are growing louder as the harm from profit maximising behaviour becomes clearer.
Subtopic 3.3 and Subtopic 3.4 focus on ways we can design business differently, and many of the policies and strategies discussed throughout this course are about reshaping our relationship with profits and power.
Figure 10. Countries are taking a closer look at windfall profits, very high profits earned in circumstances that give companies enormous power to increase prices and profits.
(Credit: Svetlana, licensed from Adobe Stock)
Activity 3.1.7
Activity 3.1.7
Concept: Systems, Power
Skills: Thinking skills (transfer, critical thinking)
Time: varies, depending on option
Type: Individual, pairs, or small group
Option 1: Illustrating relationships to profit
Time: 40 minutes (could be longer if students choose B, depending on detail)
In this section, you learned that profit is shaped by many connected relationships. Your task is to show one or more of these relationships visually using systems diagrams or another visual representation. The goal is to make relationships visible and understandable to others.
A: Systems diagram
Using ideas from Subtopic S, create a simple systems sketch that shows how profit is linked to other parts of the economy (for example labour, care, nature, public systems, or power). You might consider using stocks and flows, causal loops with feedback.
B: Visual illustration
Create a cartoon, poster, or icon-based illustration that explains an idea about profit from this section. Be ready to explain your image to a partner, group, or the class:
What relationship did you choose to show?
What does your image help others understand about profit?
Option 2: A reflection on profit maximisation
Time: 15 minutes or longer depending on whether students write or only discuss orally
In many mainstream economics models, firms are assumed to maximise profit, and profit maximisation is often listed as their main goal in both economics and business courses.
In this section, you explored how profits can come from innovation and value creation, but also from value extraction that weakens care systems, ecosystems, and public institutions.
Given what you have learned in this section, should we continue to teach profit maximisation as the main goal of firms in markets? Explain your thinking.
Option 3: What questions should we ask about profit?
Time: 10-15 minutes (could be doubled if more than one scenario is chosen)
Below are four different situations where a business earns profit. Your task is to think like an investigator.
Choose one situation from the list below.
Write three questions you would need to answer in order to judge the profit fairly. Your questions should help you understand where the profit comes from and who or what is affected.
After you have written your questions, to help you reflect, try to finish these sentence starters:
Profit supports social and ecological systems if it…
Profit undermines social and ecological systems if it…
Choose one (or two if you have time to do more):
A local bicycle repair shop earns a steady profit by repairing and maintaining bikes for people in the neighbourhood.
A large social media company earns high profits by selling advertising based on users’ online behaviour.
A mining company earns profits from extracting raw materials used in electronics and batteries.
An energy company earns record profits during a supply shock.
If you need some hints, you can click on the arrow below. But give it a go yourself first.
What might you ask about the workers?
What might you ask about the other resources the business uses?
What might you ask about relationships with suppliers?
What might you ask about the institutions or infrastructure the business depends on?
What might you ask about taxes?
What might you ask about lobbying or other forms of influence?
Option 4: Case study - Meta and profit in the attention economy
Time: 30-40 minutes (depending on whether students work in pairs/groups which would likely add more time for discussion)
Meta Platforms owns Facebook, Instagram, and WhatsApp. Billions of people use these services to communicate, share photos, follow news, and run small businesses. Most users do not pay money to use Meta’s platforms.
Meta earns most of its revenue by selling advertising. Advertisers pay to reach specific groups of users based on age, location, interests, and online behaviour. To make this possible, Meta collects large amounts of data about how people interact with content and with each other.
Meta designs its platforms to maximise engagement. Features such as infinite scrolling, notifications, and personalised content are meant to keep users active for longer. More time on the platform means more advertisements can be shown, increasing revenue.
The content that attracts attention is largely created by users themselves: posts, videos, comments, and messages. This constant stream of free content makes the platforms valuable to advertisers. Meta does not pay users for creating this content, but it earns profit from the attention it generates.
Meta also relies on shared systems. Its business depends on public infrastructure such as the internet, electricity networks, education systems that build digital skills, and legal systems that protect contracts and intellectual property. At the same time, Meta has used international tax structures to reduce the amount of tax it pays in some countries, increasing the share of revenue it keeps as profit.
Researchers and regulators have raised concerns about the wider effects of this business model. Engagement-driven platforms can encourage excessive screen time, reduce attention for relationships and care, and amplify harmful or misleading content because it spreads quickly. These effects can weaken trust, wellbeing, and democratic processes, even while profits rise.
Questions for students (some sample answers follow, but give it a go yourself first!
1. What value does Meta create for users and advertisers?
Identify at least two ways Meta provides something people find useful or valuable.
2. Where does Meta’s profit come from?
Using the text, list the main activities that generate Meta’s revenue. Be specific about what is being sold and to whom.
3. Which parts of Meta’s business model might involve value capture rather than value creation?
Look for examples where Meta benefits from value created by others not (or not fully) compensated.
4. What social systems might be weakened if this model continues at scale?
Use examples from the text, such as attention, care, trust, or public services.
5. Why does it matter where profit comes from?
Explain why societies might need to respond differently to profits that come from long-term value creation than to profits that come from harm, extraction, or weakened social systems.
Click below for some sample responses if you need support or want to compare your ideas.
1. What value does Meta create for users and advertisers?
Meta provides tools that help people communicate, share photos and videos, follow news, and stay connected across distance. Many small businesses also use its platforms to reach customers and promote their products. For advertisers, Meta offers access to large audiences and allows ads to be targeted to specific groups, which can make advertising more effective.
You might emphasise social connection, convenience, business reach, or entertainment. All are valid.
2. Where does Meta’s profit come from?
Meta earns most of its profit by selling advertising space. Advertisers pay Meta to show ads to users based on their age, location, interests, and online behaviour. The more time users spend on the platforms, the more ads Meta can show, which increases revenue.
3. Which parts of Meta’s business model might involve value capture rather than value creation?
Much of the content that keeps people engaged is created by users for free. Meta does not pay users for posts, videos, or comments, but it earns money from the attention this content generates. Meta also benefits from public infrastructure like the internet and education systems, while using tax structures to reduce how much it contributes in some countries.
You might argue that users are ‘paid’ through free services. This is a reasonable counter-argument and worth discussing, especially if you consider how much value your data is providing Meta vs. the value to you of using the services. Some researchers have tried to figure this out.
4. What social systems might be weakened if this model continues at scale?
If platforms compete for attention, people may spend less time on care, relationships, and rest. Engagement-driven systems can also spread harmful or misleading content, which can weaken trust and democratic debate. If large companies reduce their tax payments, governments may have less money for public services.
You might focus more on wellbeing, democracy, or public finance. Different emphases are valid.
5. Why does it matter where profit comes from?
If profit comes from creating long-term value, it can support wellbeing and social stability. If profit comes from harm or extraction, such as exploiting attention or weakening public systems, it can damage the foundations that economies depend on. This is why societies may choose to regulate, tax, or limit certain forms of profit.
Opinions will vary here. The key is whether you explain why the source of profit matters, not which position you take.
Checking for understanding
Checking for understanding
Further exploration
Further exploration
The unpaid work that GDP ignores – and why it really counts - a TED Talk from Marilyn Waring, who explains the vital importance of unpaid care and domestic work in the economy. Difficulty level: easy
What is Feminist Economics? - Short video from the Institute for New Economic Thinking where economist Diana Strassmann discusses what feminist economics focuses on, explaining that the field of economics is incomplete unless it understands care work and the outsized role of women and girls in that care. Difficulty level: medium
What does profit really mean, and why do we get it wrong? A sharp critique of many (not all!) profit-making and profit-maximising strategies, particularly from large firms oriented on shareholder value above all else, from economist Richard Murphy. Difficulty level: easy/medium
An economy for people and planet, not profit - A short video narrated by economist Jennifer Hinton, where she explains the problems with the for-profit economy and how we might reorganise business activities to better support people and planet. Difficulty level: easy
How Elites Captured Capitalism | Grace Blakeley on Power & Inequality (Better Future 005) - A long form interview with economist Grace Blakeley where she explains how the rich and powerful control capitalism, why governments often help them get richer, and how regular people can fight back by working together. Difficulty: Medium.
Sources
Sources
Dharmapala, D. (2014). What do we know about base erosion and profit shifting? A review of the empirical literature and tax policy implications. University of Chicago Law Review, 81(3), 845–894. https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=2385&context=law_and_economics#:~:text=This%20paper%20provides%20a%20survey,this%20literature%2C%20on%20describing%20what
Folbre, N. (2014). Who cares? A feminist critique of the care economy. Rosa Luxemburg Stiftung. https://www.rosalux.de/fileadmin/rls_uploads/pdfs/sonst_publikationen/folbre_whocares.pdf
Harvey, D. (2018, March 14). Marx’s refusal of the labour theory of value. Reading Marx’s Capital with David Harvey. https://davidharvey.org/
Hinton, J. (2021). Relationship-to-profit: A theory of business, markets, and profit for social ecological economics [Doctoral dissertation, Lund University]. Lund University Research Portal. https://doi.org/10.13140/RG.2.2.31508.73603
HM Revenue & Customs. (2022, November 21). Energy (Oil and Gas) Profits Levy. https://www.gov.uk/government/publications/changes-to-the-energy-oil-and-gas-profits-levy/energy-oil-and-gas-profits-levy?utm_source=chatgpt.com
Ironmonger, D. (2001). “Household Production and the Household Economy”. International Encyclopedia of the Social & Behavioral Sciences. https://doi.org/10.1016/B0-08-043076-7/03964-4
Knight, F. H. (1921). Risk, uncertainty and profit. Houghton Mifflin.
Lammer, C., & Thiemann, H. (2024). Introduction: Infrastructuring value. Ethnos, 89(2), 195–218. https://doi.org/10.1080/00141844.2023.2180063
Raworth, K. (2017). Doughnut economics: seven ways to think like a 21st century economist. London: Penguin Random House.
S&P Global Energy Horizons. (2024, July 2). Unpriced environmental costs: The top externalities of the global market. S&P Global. https://www.spglobal.com/sustainable1/en/insights/blogs/unpriced-environmental-costs-the-top-externalities-of-the-global-market
Terminology
Terminology
Link to Quizlet interactive flashcards and terminology games for Section 3.1.7 Profits
profit: total revenue minus total cost
consumer: someone who buys and uses resources and products ot meet needs
market: a system where people buy and sell goods and services for a price.
break even: when a business earns exactly enough money from sales to cover all its costs
invest: dedicating money, time, or effort into something with the expectation of future financial returns or a positive outcome
profit maximisation: the strategy where a business tries to achieve the highest profit possible
household: a system where people living together care for each other and do domestic work, often termed the 'core economy'
reinvest: putting the profit on a previous investment back into the same business or activity
capitalism: an economic system where capital is privately owned, markets dominate, there is competition between businesses and the function is to earn maximum profits for owners of capital
economy: all the human-made systems that transfer and transform energy and matter to meet human needs and wants
capital: assets or valuable resources used to generate income
shareholder: a person or organisation that ownes a share, or portion, of a business
capital accumulation: when profits are turned into more capital (money, machines, land, etc.) owned by businesses, owners or shareholders, increasing their wealth and power over time.
wages: payment for work
income: money received from work or investments
wealth: the total value (stock) of someone’s assets such as money, house, or investments
power: the ability to influence events or the behaviour of other people
investment: money spent for the enhancement of human or physical capabilities
innovation: creating new or better ways to meet needs and wants, or solve problems, often by combining ideas, resources, or technologies in fresh ways
entrepreneur: a person who sets up a business
value creation: transforming resources into outcomes (products, services, relationships, or experiences) that beneficial or meaningful to individuals, communities, or ecosystems
value extraction: when an entity (such as a business, state, institution, or individual) takes value from others without paying the full cost or providing fair compensation
system: a set of interdependent parts that organise to create a functional whole
perspective: a way of regarding something; a point of view
energy: the ability to do work or cause change
ecosystem services: any positive benefit that ecosystems provide to people
ecological economics: a strand of economics that studies the relationship between human economies and ecosystems
care: the act of providing what is necessary for the health, welfare, upkeep, and protection of someone or something
state: a system that provides essential public services, and also governs and regulates other economic institutions
infrastructure: large scale physical systems that a society needs to function (roads, railways, electricity networks, etc)
tax: payment from individuals or organisations to the government, used to provide public infrastructure and services
base erosion and profit shifting (BEPS): when companies use legal tricks to move their profits to countries with very low taxes, so they pay less tax overall, reducing the money available for 'base' public services like schools and hospitals
inelastic demand: when consumers do not react strongly to some factor that affects them such as price changes
market power: the ability of a firm to influence the price of their product in a market, as well as other market conditions
intellectual property: creations of the human mind such as inventions, designs, data, logos, computer code, and others
digital platform: an online space like a website or app where people can interact, share information, or buy and sell things; examples are social media, online markets, and search engines
asset: valuable resources used to generate income
economic rent: profit earned by controlling scarce or essential resources, like land or data, rather than by value creation
ethics: a set of moral principles about right and wrong that affect how people make decisions and lead their lives
culture: the beliefs, values, attitudes, behaviours and traditions shared by a group of people and transmitted from one generation to the next
extraction: taking something away from somewhere else, especially using effort or force
bargaining position: the strength or weakness someone has in a negotiation, often shaped by how much they depend on the outcome and what other options they have
regulation: a rule that guides individual or group behaviour and enforced by an authority
state capture: when powerful groups or companies control government decisions to serve their own interests instead of the public good
success-to-the-successful: a system trap where early success brings more resources and advantages, creating a cycle where winners keep winning because of the system, while others fall behind
system trap: when a system’s structure causes persistent problems
tax avoidance: using legal methods to pay less tax, often by moving money or profits to where taxes are lower
biodiversity: the variety of living organisms on Earth
institution: human-made systems of rules and norms that shape social behavior
regenerative economy: an economic system that meets human needs in a way that strengthens social and ecological systems
ecosystem: the interaction of groups of organisms with each other and their physical environment
windfall profit: unexpected, very high profits that a business earns not because of its own effort or innovation, but because of outside events, like a crisis, shortage, or sudden change in rules
redistribution: policies that move income or wealth from richer people to poorer people, for example through taxes and welfare
predistribution: policies that shape the economy so wealth is shared more fairly from the start, for example by setting fair wages
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