The Amazing Things & Ideas - Profits Are Proof of Service
Profits Are Proof of ServiceEvery step toward the elimination of profit is progress on the way toward social disintegration.In a free market, when a business generates a profit, it signals that it has produced something that consumers value enough to pay a price that exceeds its cost of production. Entrepreneurs are always looking to discover and capitalize on profit-making opportunities. Their actions play a crucial role in setting the prices of the factors of production. Hence, when an entrepreneur succeeds in making a profit, it means that he has not only satisfied the wants of consumers but has done so better than other entrepreneurs. Conversely, losses indicate a misallocation of the factors of production or a failure to meet consumer demands effectively. Contrary to the common fallacy, profits aren’t “taken out” of anything. Entrepreneurs profit because they enrich their customers, not impoverish them. Profit and loss are simply signals through which consumers delegate the management of production activities to those who are best fit to serve them. In our society, a prevailing and dangerous moral stance glorifies altruism and, out of ignorance, condemns profit and those who earn it. This widespread view, despite claiming moral superiority by equating terms like “profit” with “exploitation” and “selfishness” with “callousness”, causes a great deal of harm. By taxing profits (both monetarily and psychologically), people are discouraged from producing goods and services in the most efficient manner. As Mises wrote, “Increasing costs per unit of output, that is, waste, is praised as a virtue.” How can it possibly be moral to use scarce, valuable resources in a wasteful manner? There is no such thing as “excessive profits”. In a free market, profit isn’t an automatic return on capital; entrepreneurs cannot guarantee themselves a “normal” rate of profit by engaging in a set of default activities. And entrepreneurs are not obligated to “give back” to society. Profit is the natural reward of an entrepreneur’s contribution to society. Equality achieved through the forceful confiscation and redistribution of wealth is unfair and disintegrating for society. In the absence of a profit motive, the allocation of resources becomes arbitrary and inefficient. Profits ensure that resources are used in ways that create maximum value, as determined by the consumers themselves. Without the need to make profits and avoid losses, people “in charge of production” would not be bound to the desires of the consumers. I put the phrase in charge of production in scare quotes because those people are not really producing. They are consuming their resources by investing in processes that they themselves think are the best way but not those who are the supposed beneficiaries. Per Bylund said it best: “To want to ‘make a difference’ in society yet not in a way that can earn you profits really means you want to change things for others without asking for their approval.”
Socialists cannot escape economic reality. A society organized without the profit and loss mechanism still faces the essential task of allocating scarce resources effectively. The abolition of profit will only result in continuous losses, leading to a point where there’s nothing left to lose. We can’t let them win. Follow me on X: @arjunkhemani Click here to support my work. |
Older messages
#119 – Creativity: Our Only Way Forward
Sunday, November 26, 2023
Rejecting Career Paths and Planning for Uncertainty
#118 – Inequality is Not a Problem, Poverty is
Sunday, November 12, 2023
We will only have perfectly achieved equality when we are all dead.
The Altruism Trap: How Self-Sacrifice Stymies Progress
Sunday, October 29, 2023
If everyone sacrificed their own happiness for the happiness of others, no one would be happy.
#116 – The Religion of Science
Sunday, October 8, 2023
Addressing a form of zealotry that is cloaked in the guise of science.
#115 – The Myth of the Compromise
Sunday, October 1, 2023
The notion of compromise often receives praise as a virtuous middle ground, a means for rationally resolving conflicts and maintaining harmony. It is the balanced solution where everyone gets a little
You Might Also Like
Around the Newsletter Universe (May Edition)
Friday, May 3, 2024
feed your inbox.
Where do you start?
Friday, May 3, 2024
We have 4 updates for you this week: 1. Where do you start improving your website? Congrats you want to improve your website performance. Everyone has their ideas on where to start. Your competitors
📌 Double Days Sale 📌 Promo Pins for Authors for a Limited Time
Friday, May 3, 2024
Advertise on Pinterest boards that get thousands of views/month Enable Images to See This PINTEREST PROMOS FOR AUTHORS & PUBLISHERS Enable Images to See This $30 for 30 Days of Pins! & ORDER BY
🎤 SWIPES Email (Friday May 3rd, 2024)
Friday, May 3, 2024
The SWIPES Email Edition: Friday, May 3rd, 2024 An educational (and fun) email by Copywriting Course. Enjoy! 🎤 Listen to this email here: Swipe: You know your Uncle Neville, he loves a good
Community Seats for Mai 2024 to Juli 2024
Friday, May 3, 2024
50 % off the Regular Price — Thank you for Being a Subscriber!
Don’t Do These 5 Things
Friday, May 3, 2024
How many of these things will you stop doing?
👷♂️ He scaled a business with 4-ton metal boxes
Thursday, May 2, 2024
We could hardly contain ourselves with this shipping container story… This Bob is building a BIG shipping container business Hey Contrarians, 5 years ago, Robert "Bob" Balderas made a U-turn
3-2-1: Simple ways to be at peace, the source of reputation, and finding unfair advantages
Thursday, May 2, 2024
3 ideas, 2 quotes, and 1 question to consider this week.
Ahrefs’ Digest #181: Why big companies make bad content, and more
Thursday, May 2, 2024
Our meme of the week: 📰 News & updates Google March 2024 core update is done: It actually finished on April 19th but Google didn't tell anyone until one week later. Google Publisher Center to
When It's Better Not to Share Where Things are Made
Thursday, May 2, 2024
When marketing backfires